Mortgage Approvals – May 2016

Banking & Payments Federation Ireland (BPFI) has published the latest figures from the BPFI Mortgage Approvals Report for the three months ending May 2016.[1]

The following are the key elements:

  • A total of 2,675 mortgages were approved per month, on average, in the three months ending May 2016 – some 1,441 (53.8%) were for first-time buyers (FTBs) while mover purchasers accounted for 775 (29.0%).
  • The number of mortgages approved rose by 8.7% year-on-year and increased by 16.0% month-on-month.
  • The value of mortgages approved per month, on average, in the three months ending May 2016 was €523 million – of which €270 million (51.7%) was accounted for by FTBs and €188 million (36.0%) by mover purchasers.
  • The value of mortgage approvals rose by 7% year-on-year and by 18.1% month-on-month.

Both re-mortgage and top-up mortgage approvals grew on a year-on-year basis with re-mortgage (or switching) activity rising to its third highest level since July 2014.

Data collection for the BPFI Mortgage Approvals Report began in September 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The BPFI Mortgage Approvals Report May  2016  as well as the time series data file is available on the BPFI website here.

[1] All figures are based on the three-month moving average.  Year-on-year compares the average for the three months ending May 2016 with the three months ending May 2015.  Month-on-month compares the average for the three months ending May 2016 with the three months ending April 2016.

Note: Banking & Payments Federation Ireland is the voice of banking and payments in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

 Contact: Jillian Heffernan, Head of Communications, 087 9016880

Payment Services Directive II

It’s anticipated that the Payment Services Directive II (PSD2) will create more choice and better conditions for consumers and businesses. While the Directive was adopted in late 2015, member states have two years to transpose into national law the new measures which are expected to improve consumer protection in the areas of fraud, possible abuses and payment incidents, such as disputed transactions. Furthermore, they will ensure that all payment service providers (PSPs) active in the EU are subject to the appropriate rules and supervision. In addition, the European Banking Authority has been asked to prepare and develop security standards and maintain a list of registered payment institutions in Europe along with a number of other regulatory technical standards. BPFI is working with its members in assessing the implications of PSD2 and supporting operational roll-out which is expected to be completed by the end of 2017.  Either way, PSD2 will increase competition in the payments market with clear recognition of third-party providers and their role in the provision of payment services and account information services.

Briefings provided to stakeholders

The publication by BPFI of our most recent data relating to the SME market and to the mortgage market afforded an opportunity to provide briefings to relevant stakeholders.  The findings of the latest DKM/SME Market Monitor were shared and discussed with a group that included representatives from the Dept of Finance, the Dept of Enterprise, Jobs & Innovation, the Credit Review Office, Microfinance Ireland, ISME and Chambers Ireland.  Issues pertaining to the mortgage and wider housing market were extensively discussed with representatives from estate agents, brokers, surveyors and economists around publication of our latest Mortgage Approvals Report and Housing Market Monitor.

Proportionality concerns over EU guidelines

BPFI members recently met with the Central Bank to discuss concerns around the lack of proportionality in the Capital requirements regulation and directive (CRR/CRD) remuneration framework. Although this anomaly is recognised at EU level, a short term solution is not yet envisaged. For January 2017 EU banks may therefore have to apply the CRR/CRD standards, which will mean introducing new systems, possible outsourcing demands and staff bonus disincentives for banks of any size as well as variable remuneration of any amount until the legislation is rectified in a few years. In the short term BPFI continues to work with its EU colleagues to seek proportionality in the implementation of such rules until they are changed in a few years and proportionality is restored.

Single Resolution Board holds latest industry dialogue meeting

BPFI has participated in the third industry dialogue meeting hosted by the Single Resolution Board (SRB) which took place in May. The Central Bank was also in attendance. The agenda focused on the SRB’s 2016 Work Plan on resolution planning, simplified obligations for less significant institutions (LSIs) and the single resolution fund. The SRB is currently in the process of collecting 2016 contributions to the fund and expects to collect €6.4 billion by the end of June. In early May institutions were notified of their annual contribution amounts. The SRB informed us that 52% of the banks contribute via the lump-sum system; 26% are middle-size institutions; and 20% of the institutions pay risk adjusted contributions. However, these risk-adjusted contributions account for 96% of the total amount of contributions. The SRB also spoke about contributions to SRB administrative expenditures. A provisional system is currently in place, with a final system expected to be in place from 2017. During the provisional period all entities are required to pay contributions but only significant institutions were invoiced and pay in advance. Institutions that have not paid during the provisional period will have to pay in 2017.

FIBI establishes new International Banking Working Group

A new International Banking Working Group, led by the Federation of International Banks in Ireland (FIBI) and established under the government’s IFS 2020, brings together CEOs, country officers and country heads of international banks operating in Ireland.  The primary purpose of this Group is to identify areas where changes are required to strategically position the industry to deal with future developments and to harness the new structures put in place under IFS 2020. FIBI is an affiliate of BPFI.

BPFI joins international Corporate Governance Task Force

BPFI is representing the European Banking Federation (EBF) on the newly-formed International Banking Federation (IBFed) Corporate Governance Task Force. The group’s first engagement was held in May where it was noted that the Irish financial services corporate governance requirements are of a particularly high standard. Many countries apply a principles-based approach, rather than a code accompanied by an annual compliance statement as is the case here. In addition, conduct matters have not been universally considered and remuneration guidelines are more demanding in the EU than in the rest of the world.

Global gathering tackles financial education

Delegates from across the globe, including BPFI, recently gathered in Amsterdam to attend the OECD’s bi-annual Global Symposium on financial education in Amsterdam. The two-day event was co-hosted by the Dutch Moneywise Platform, the national platform in which partners from government, financial institutions and NGOs work to promote financial literacy. The theme of the symposium was financial resilience throughout life and speakers included the Dutch Minister of Finance, Joroen Dijsselbloem, Dutch Central Bank President, Klass Knot and Dutch Queen Maxima. Key takeaways from the symposium included the importance of national strategies in advancing financial education; a multi-stakeholder partnership approach in implementing these strategies and the need for a holistic and more creative approach in achieving financial literary.

As part of its contribution to this year’s European Money Week, under the auspices of the European Banking Federation, BPFI launched a series of new content streams on its online education resource BusinessEducation.ie. The updated resource was unveiled at a financial education stakeholder event hosted by BPFI and attended by members as well as representatives from the education, consumer and banking sectors. BusinessEducation.ie is an online resource for teachers and students of leaving cert Business, Economics and Accounting developed by BPFI in conjunction with the Business Studies Teachers’ Association of Ireland (BSTAI).

Award for Cork Cashes Out campaign

Cork Cashes Out, the BPFI-supported pilot initiative rolled out in Cork city to encourage cashless payments, won an international award at the Contactless and Mobile Awards 2016. Led by Cork City Centre Forum, the three-month initiative was launched in November with the aim of promoting Cork as Ireland’s first cash-free city by highlighting the benefits of electronic payments for both businesses and consumers including security, ease of use and convenience. The campaign was supported by BPFI and its member banks.

Cork Cashes Out was shortlisted in the ‘Contactless and Mobile City Initiative’ category and saw off competition from the UK, India and the Czech Republic to secure the top prize at a ceremony in London. The award, which recognised the most ambitious and widespread initiative to implement mobile or contactless technology, was accepted by a delegation including Cork City Centre Forum, H+A Marketing + PR, BPFI, Cork Chamber of Commerce and Cork City Council.